All E Technologies coming with an IPO to raise upto Rs 48.20 crore

All E Technologies

• All E Technologies is coming out with a 100% book building; initial public offering (IPO) of 53,55,200 Equity Shares of face value of Rs 10 each in a price band Rs 87-90 per equity share.
  
• The issue will open for subscription on December 9, 2022 and will close on December 13, 2022.
  
• The shares will be listed on NSE Emerge Platform.
  
• The face value of the share is Rs 10 and is priced 8.70 times of its face value on the lower side and 9.00 times on the higher side.
  
• Book running lead manager to the issue is Unistone Capital.
  
• Compliance Officer for the issue is Akash Chaudhry.
  

Profile of the company

All E Technologies (Alletec) is a Microsoft Business Applications & Digital Transformation company. In this age of relentless transformations powered by forces of the digital era, Alletec helps clients stay ahead with Intelligent Business Applications. Leveraging the suite of Microsoft Dynamics 365, Power Platform, Data & AI - powered by Microsoft Azure & Collaboration platforms – its industry solutions and services prepare its clients to win in this volatile, uncertain, changing and ambiguous business environment.

The company helps in bringing together - Company & Customers, Factory & Field Service, Store Front & Supply Chain, Patients & Providers, People & Governments - by putting in place integrated operational systems of ERP, CRM, Collaboration Portals, Mobile Apps, and enable businesses to draw actionable insights from data. It provides consulting services for solution assessments, provides product licenses, carries out solution implementation, provides solution enhancements and on-going support. It also provides offshore technology services to some large Microsoft Business Applications partners from the USA and Europe.

Proceed is being used for:

• Expansion of Business.
  
• Acquisitions of Businesses in similar or complementary areas.
  
• General Corporate Purposes.
  

Industry overview

The IT services market is expected to register a CAGR of about 10.36 % during the forecast period, 2022-2027. Globally, the increased IT spending, coupled with the widespread adoption of software-as-a-service and increased cloud-based offerings, indicates the demand for IT services in the industry. With an improved IT infrastructure, threats related to data (data breaches) are also on the rise. This demands advanced security solutions over traditional ones. With this trend gaining traction in the market, companies have started to invest their resources in enhancing their advanced security offerings. Trends like 5G, Blockchain, AR, and AI, are likely to have an impact on the offerings of IT services. With 5G technology on its way, it is likely to ensure that the companies may set up networks on their premises. The digital transformation is expected to enable either setting up new networks as per local frequencies or upgrading existing networks on LTE. This requires the creation of real-time IT locations to facilitate the automation and autonomy of complex systems.

The IT & BPM sector has become one of the most significant growth catalysts for the Indian economy, contributing significantly to the country’s GDP and public welfare. The IT industry accounted for 8% of India’s GDP in 2020, and it is expected to contribute 10% to India’s GDP by 2025. India's rankings improved four places to 46th position in the 2021 edition of the Global Innovation Index (GII). The IT industry accounted for 8% of India's GDP in 2020. According to STPI (Software Technology Park of India), software exports by the IT companies connected to it, stood at ? 1.20 lakh crore (US$ 16.29 billion) in the first quarter of FY22. India is the leading sourcing destination across the world, accounting for approximately 55% market share of the $ 200-250 billion global services sourcing business in 2019-20. According to the National Association of Software and Service Companies (Nasscom), the Indian IT industry's revenue is expected to touch $ 227 billion in FY22 from $ 196 billion in FY21. According to Gartner estimates, IT spending in India is expected to increase to $ 101.8 billion in 2022 from an estimated $ 81.89 billion in 2021.

Pros and strengths

Digital Marketing: The company has a dedicated digital marketing team that works constantly on various aspects of Digital Marketing, including SEO. Members of the delivery team, senior consultants and management members regularly create meaningful content to help the digital marketing team. The content includes articles, blogs and videos. It also run digital ad campaigns from time to time on popular platforms like LinkedIn and Google. The digital marketing initiatives result in several incoming leads. This is an area that it try to constantly strengthen.

Microsoft relationship: By virtue of the company being amongst the most prominent partners for Microsoft Business Applications it maintain close relationships with the Microsoft Sales & Marketing teams in India, USA and Africa. This results in Microsoft working closely with it and sharing with it leads & opportunities. Teams on both sides engage together to win business.

Sales Associates: The company has signed up sales partnerships with select companies in Canada, USA and Africa. These have been in place for a few years and are mature. Four of these partnerships are active and keep yielding results at regular intervals. It explores partnership opportunities for the geographies of its interest, particularly if it doesn’t have a direct presence in the region.

Risks and concerns

Intense competition: The company operates in a competitive industry that experiences rapid technological developments, and changes in customer requirements. Its competitors include the big four Global System Integrators, in addition to some mid-sized, and several smaller local competitors in the various geographic markets in which it operate. The company may face competition from companies that grow in size or scope as the result of strategic mergers or acquisitions, which may result in larger competitors with significant resources that benefit from economies of scale and scope. Such events could have a variety of negative effects on its competitive position and its financial results, including reducing its revenue, increasing its costs, and lowering gross margin percentage.

Investments in human capital and technology may not yield the intended results: The company invests in and intend to continue investing in human capital to enhance its technical capabilities, particularly with a view to enter into new areas. Its focus areas currently include developing integrated digital transformation frameworks based on Microsoft Business Applications & the Microsoft Stack, for the industries of its focus. It engages in developing intellectual property combining industry knowledge with its technical expertise. Its choice of focus areas and investments in technology and human capital are based on the management’s perception of the industry. It cannot assure that such investments will yield the intended results. Inability of the Company to achieve intended results from its investments in technology and human capital may adversely impact its cash flows and results of operations.

Require certain statutory and regulatory permits, licenses and approvals: The company requires certain statutory and regulatory permits, licenses and approvals to operate its business. It has obtained all the requisite permits and licenses which are adequate to run its business. However, there is no assurance that there are no other statutory/regulatory requirements which it is required to comply with. Failure to renew, maintain or obtain the required permits or approvals in time may result in the interruption of its operations and may have a material adverse effect on its business.

Outlook

All E Technologies is a Microsoft Business Applications & Digital Transformation company. Alletec helps clients stay ahead with Intelligent Business Applications. The company offers Microsoft Dynamics 365, Power Platform, Data & AI - powered by Microsoft Azure & Collaboration platforms. The company help in bringing together - Company & Customers, Factory & Field Service, Store Front & Supply Chain, Patients & Providers, People & Governments - by putting in place integrated operational systems of ERP, CRM, Collaboration Portals, Mobile Apps, and enable businesses to draw actionable insights from data. It also provides offshore technology services to some large Microsoft Business Applications partners from the USA and Europe. The company's 100% workforce shifted to a work-from-home model after the Covid restrictions. The company's primary physical office is in Noida. On the concern side, the company’s business operations are subject to operating risks such as performance below expected levels of output or efficiency. The occurrence of these risks, if any, could significantly affect its operating results, and the slowdown of business operations may have a material adverse effect on its business operations and financial conditions.

The issue has been offered in a price band of Rs 87-90 per equity share. The aggregate size of the offer is Rs 46.59 crore to Rs 48.20 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased from Rs 6121.52 lakh in year ended March 31, 2021 to Rs 7004.90 lakh in year ended March 31, 2022 with a resultant increase of 14.43% in year ended March 31, 2022 due to increase in sales. Restated Profit / (Loss) after tax, after extra ordinary item and after minority interest for the year decreased from Rs 866.34 lakh in year ended March 31, 2021 to Rs 858.86 lakh in year ended March 31, 2022 with a resultant decrease of 0.86% in year ended March 31, 2022. Meanwhile, the company invests in and intends to continue investing in human capital to enhance its technical capabilities, particularly with a view to enter into new areas. Its focus areas currently include developing integrated digital transformation frameworks based on Microsoft Business Applications & the Microsoft Stack, for the industries of its focus.